This Week in Leadership (Nov 29 - Dec 5)
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Ford’s naming of Jim Hackett as the new CEO – which was announced recently – appears to be a bet that its future will look considerably different than its present. Hackett was the chariman of Ford Smart Mobility, the automaker’s unit responsible for car sharing, digital-ride hailing and other high-tech transportation technologies, initiatives that sounded more at home in a science-fiction novel than at the manufacturer of the F-150 pickup. Hackett’s resume is a real-life example of leadership agility. For many years, he was the CEO of office furniture maker Steelcase, and in 2014 he was the University of Michigan’s interim athletic director, where his most prominent achievement was recruiting the school’s football coach, Jim Harbaugh.
Before Hackett, 62, became CEO, he spoke exclusively with Korn Ferry's Briefings about the challenges of creating a culture of high-tech innovation within a century-old carmaker.
Ford Motor Co. started in 1903 and now must attract computer-software engineers and artificial-intelligence experts who might be more inclined toward fledgling Silicon Valley startups and digital behemoths like Google and Facebook. How can an automaker compete for the talent it needs?
David Kelley (founder of IDEO design), who recently visited Ford’s Greenfield Labs in Palo Alto, said our work on advanced mobility is the most important thing that’s happening today in the Valley. It’s a very complicated problem, which is very attractive to design engineers and specialists in technology. The difference between an engineer who builds a car and one who builds a robot or computer isn’t as great as you might think. I’m getting a résumé an hour from Stanford, but the applicants are willing to come to southeast Michigan if that’s where we need them.
How do you explain the nature of what you’re doing to young people in a way that gets them excited about coming to Ford?
We faced the same problem at Steelcase. We were able to attract young people when we explained to them that their mission was to reinvent work and shape its future. Today’s picture of the auto industry is one of auto shows and the machines we’ve all grown to love. But how about if I tell you that the Ford Transit van of the future won’t be simply a machine to deliver merchandise, but it will be so smart and play a critical role in all of logistics? The design of logistics is changing and will change more. The domain of advanced mobility just grows and grows. I can’t go too far in emphasizing this.
Do automotive companies like Ford have to adjust their thinking to account for the new and younger generation of professionals they’re hiring?
I was watching a PBS special from a few years back about the Department of Defense’s robotics competition. The universities were represented and so was Ford. It was unusual to have a corporate team, and the credibility of Ford in this field has been understated. The startup Argo.AI (in which Ford announced a $1 billion investment and took a controlling stake) shows that Ford is really committed to this business. The data problem we face is immense, requiring us to chart every possible situation that a driverless vehicle could face. Imagine a piece of data like a clipping of grass picked up in the bag behind a lawnmower. Now imagine the lawnmower traveling at 70 miles an hour. And lots of other lawnmowers traveling at 70. The science is evolving very quickly to calculate what an intelligent vehicle must do next, surpassing the judgment of a human driver. The world underestimates how big a computing challenge this is.
The incentives, compensation, and conditions at a tech firm, whether it’s a startup or an established firm, are so different than at an automaker. Do you envision making Ford’s structure looking more like a tech firm to attract top software engineers and data scientists?
I would say it’s a step function when you are moving folks from the long-lived corporate enterprise to a startup. The first example we have at Ford is our Pittsburgh startup, Argo.AI. It created a compensation program that grants equity participation, similar to other startups. On the other hand, Ford Smart Mobility started with Ford people and the promise of being in a startup sits there even with its closer ties to Ford Motor Company. While 70 to 80 percent of all startups fail, the company is backing Ford Smart Mobility. So it is not same risk factor for the employees. For me, this had great appeal at my age. Also, horizons for investment are the same as if Ford wasn’t involved, but we have the deeper pockets of a corporate holder. Ford has the focal point of a longer-term shareholder. And there are exciting things already brewing. Inside Ford Smart Mobility, we own Chariot (a ride-sharing startup acquired by Ford). It had 15 employees and now hundreds. We intend to take ideas like these as far as they will go.
Could you explain what you observe about the cultural differences between those from the software world and the auto world?
I’ve got one in mind that may seem a little abstract. Software people use “agile design,” which means making constant small improvements, or “design on-the-fly,” if you will. Customers are taught incrementally how to benefit from improvement in product such iPhones, apps, or computer-operating systems through continuous software updates. The automobile industry, by contrast, relies on stage-gated product development, which is a fundamentally different concept. We’re trying to improve this process using a concept called “design thinking,” in which you obsessively understand the nature of use and develop prototypes to ameliorate the gaps between use and product. These two design methodologies are colliding in a cool and unpredictable way. There will be lots of jobs in the areas of both agile design for software creation and new use-case design for the people building vehicles.